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Company has an allowance for bad debt on books ( and bad debt expense)

jgcpa
Level 4

From what I am reading, IRS does not allow deduction for Allowance for bad debt. The debt has not been written off. It is showing on the M-1 as a book to tax difference. Does it reduce basis as a non-deductible expense?  Or not till the actual write off?

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linette
Level 5

An accrual basis taxpayer can have bad debt.

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linette
Level 5

An accrual basis taxpayer can have bad debt.